Icahn's in trouble, but will anyone care enough to drop the hammer?

Carl Icahn has had a crummy few days. Last week he resigned as special adviser to President Donald Trump just before The New Yorker published an article detailing how the billionaire investor used his position to further enrich himself. The article quoted experts saying Icahn could be criminally charged for violating the law that bars executive-branch employees from working on any matter in which they have a direct financial interest.

With all that in mind, let's pass along some good news to Carl: It looks like he'll be able to avoid civil charges from the Securities and Exchange Commission for misleading investors.

Here's the situation: Icahn's publicly traded company, Icahn Enterprises, disclosed in its annual report this past March that he is "currently serving as a special adviser to President Donald J. Trump on issues relating to regulatory reform." The White House, however, told TheNew Yorker that Icahn's statement wasn't true because he'd never been formally appointed to the advisory role after Trump was inaugurated.

If what the White House says is correct, then Icahn published a false statement in his annual report. That is straightforward securities fraud, and the SEC can bring a civil action against him and force him to pay a fine.

The simplest explanation for why none of this will probably happen is that Icahn was indeed a special adviser, even if the White House now says he wasn't. For starters Icahn vetted Jay Clayton before the Wall Street lawyer was appointed chairman of the SEC and met with Scott Pruitt before Pruitt was named head of the EPA.

But there's another defense the SEC could respect: No Icahn Enterprises investor really cares if Icahn advised the president while he was manning the shop at Icahn Enterprises.

"I do not think Icahn's statement that he was an adviser to Trump is material to his investors," John Coffee, a professor at Columbia Law School, said in an email.

Who are these investors? Mostly they're none other than Icahn, who controls more than 90% of the shares in his company.

The SEC wouldn't comment, and Icahn Enterprises didn't respond to an email. But regardless of what the feds decide, the big question is whether the state attorney general's office brings civil or criminal charges. A spokesman for the office didn't immediately respond to a request for comment.

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